Ontario’s housing crisis has reached a point where euphemisms no longer help. This is not a normal market correction, a soft landing, or temporary cyclical slowdown. It is a systemic failure.
Housing starts have all but evaporated at precisely the time we need new homes the most. The upcoming Ontario budget must tackle the issue head-on and include measures to kick-start the industry.
Ontario’s housing cost-to-income ratio now exceeds 9:1, putting ownership well beyond the reach of many middle-class families.
In the Greater Toronto Hamilton Area, single-family home sales have fallen 71 per cent and condominium sales have plunged an astonishing 90 per cent. Across Ontario’s major urban centres, housing starts are down sharply year over year, with Toronto alone seeing a drop of nearly 60 per cent.
Tens of thousands of construction jobs have already disappeared, and economists warn the collapse in residential construction could shave between 1.5 and 2.5 per cent off Ontario’s GDP over the next two years.
In a recent pre-budget submission, RESCON laid out 10 ways to fix the problem. For RESCON, Budget 2026 is not just another fiscal exercise.
We have called on Queen’s Park to move decisively on a package of reforms aimed at restoring affordability and reviving homebuilding.
At the heart of the argument is a simple premise: housing is a basic economic necessity, not a luxury item, and should not be taxed or regulated as if it were alcohol or tobacco.
Budget 2026 is an opportunity for the province to reverse years of policy drift that have layered taxes, fees and delays onto new housing until many projects no longer make financial sense to build.
One of our most prominent asks is an expansion of Ontario’s portion of the HST rebate to all new homebuyers for homes priced up to $1.3 million, not just first-time purchasers.
By extending the rebate more broadly – and pushing Ottawa to follow suit on the federal share – the province could lower the upfront cost of new homes and help restart stalled projects.
Arguably more urgent is RESCON’s call to roll municipal development charges (DCs) back to 2015 levels for a three-year period and fundamentally rethink how infrastructure is funded.
DCs have ballooned in many municipalities. They are effectively hidden consumer taxes embedded in the price of new homes.
They unfairly load the cost of growth-related infrastructure onto new buyers while existing homeowners are largely insulated.
Shifting more of those costs onto the broader tax base, with predictable provincial support for municipalities, would spread the burden more equitably and reduce sticker shock for buyers.
Land transfer taxes are another target. RESCON wants both provincial and municipal land transfer taxes suspended for new, never-occupied homes for three years.
These taxes as regressive, adding thousands of dollars to the cost of ownership without contributing to housing supply.
In a market already strained by high interest rates and weakened consumer confidence, there is little justification for keeping them in place on new construction.
Beyond taxes and fees, action must be taken to speed up and simplify the notoriously slow and fragmented planning and approvals system.
Canada ranks second last among OECD countries for development approval timelines, a statistic that should trouble any government serious about boosting supply.
We are calling for province-wide digitization of planning approvals, standardized designs and broader use of as-of-right zoning to cut delays that can stretch projects by years.
Builders know how to build homes. What they cannot control is a glacial approvals regime that adds cost without adding value.
We must also look to the future of construction. We need stronger provincial support for off-site and innovative building methods, as well as incentives to accelerate adoption of PropTech and ConTech.
RESCON members visited Germany last fall and saw how that country has embraced industrialized, factory-built construction and digital planning to dramatically shorten timelines and improve productivity.
Catching up is essential if we are serious about boosting supply.
We have also called on the government to remove foreign buyer bans for new housing, particularly high-rise projects.
In the current market, these bans are doing more harm than good by suppressing demand for pre-construction units that are critical to financing large projects.
Our housing policy failures did not happen overnight, nor can they be fixed with a single budget. However, bold fiscal and policy movement now can mitigate the potential consequences.
Ontario should step in where some municipalities aren’t getting the message, as has been done in Alberta, and use its authority over taxes, housing policies, infrastructure to reverse course.